BitGo launches off-chain clearing and settlement service for institutional clients

Wed, 15 May 2019, 10:14 am UTC

Crypto custodian and security firm BitGo has announced the launch of new clearing and settlement service for institutional clients.

In its press release dated May 14, the company said that the off-chain Clearing and Settlement Service is available for clients of qualified custodian BitGo Trust Company. The new service will ensure that assets never leave custody and facilitate fast, compliant, and secure clearing and settlement.

BitGo said that the new service will address various challenges faced by institutional investors in the current market structure for digital assets. This includes counterparty risk, security risk, inefficient capital allocation, and compliance infringement.

“Until now, in a digital asset trade, one party needed to assume all of the risk and act on the counterparty’s good faith, and this doesn’t really work for institutional investors,” said Mike Belshe, CEO, BitGo. “We are bringing to market a riskless, efficient, and compliant digital asset clearing and settlement, and what makes this service possible is BitGo Trust’s strong client base.”

Under BitGo’s Clearing and Settlement Service, all participants will custody their digital assets with BitGo Trust Company. With a common custodian, they would be able to choose which partners to clear and settle with, and check their trading limits pre-trade.

Importantly, assets will remain in cold storage at all times and trades will be settled off-chain. When assets are withdrawn, they are reconciled on-chain.

The service is offered to OTC desks, single dealer platforms, exchanges, asset managers, and broker-dealers, BitGo said.